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Monday, February 28, 2011

Ireka positive Aseana Properties will start to contribute in next two to three years

Ireka is involved in the construction of phases three and four of Sandakan Harbour Square in Sabah

KUALA LUMPUR: Ireka Corp Bhd is confident its 23%-owned associate company, Aseana Properties Ltd, which has been weighing down on the company's financial performance with its losses, will be able to contribute positively to the group in the next two to three years.

Ireka group executive director Lai Voon Hon said Aseana's portfolio included seven development projects in Malaysia and three projects in Vietnam. It also has a 16.4% equity investment in Ho Chi Minh City-based Nam Long Corp.

“Most of the projects in Aseana are only kicking off from this year and we see Aseana contributing positively to Ireka from financial year 2012 onwards.

“Going forward, the number of projects that will be able to contribute to Aseana's bottomline will increase.

“We are confident that beyond 2012, there will be quite a bit of profits coming in from Aseana,” Lai told StarBiz.

For the nine-month period ended December 31, 2010, Ireka recorded a pre-tax loss of RM10.26mil, compared with a pre-tax profit of RM8.16mil in the preceding year. Revenue was 7% higher at RM308.8mil.

The loss was in part attributable to a share of loss in Aseana Properties of RM7.5mil and a mark-to-market loss for share investment in Kinh Bac City Development Shareholding Corporation of RM1.6mil.

According to Lai, having Aseana as the property fund arm of Ireka is a good business model.

As the exclusive development manager of the fund, Ireka earns a fixed annual management fee and a performance fee from Aseana.

The fund holds all of Ireka's earlier ongoing property projects in Malaysia, leaving the parent company, which is also involved in construction, with an asset-light balance sheet.

“Aseana gives Ireka the platform to expand its expertise to emerging markets such as Vietnam and for the group to undertake more development projects as compared to Ireka undertaking the projects on its own.

“Listed on the London Stock Exchange, Aseana has a larger capital base and the ability to own more development assets or investments.

“Ireka currently manages a portfolio of current and upcoming projects with a total estimated gross development value (GDV) in excess of US$2bil,” Lai added.

He said with Aseana more mature now, Ireka was looking to beef up its property development division and was actively scouting for land in prime areas in Malaysia and Vietnam. It is also looking for joint venture opportunities with land owners.

Together with Aseana Properties, Ireka will soon commence on a number of new development projects, including a residential project in Jalan Kia Peng, Kuala Lumpur.

According to Lai, the plan is to raise the ratio of earnings contribution between the property and construction divisions to 50:50 over the next five years from 5:95 now.

As at Dec 31, 2010, Ireka's construction order book amounted to RM1.003bil with approximately RM430mil still outstanding.

Over the last nine months, the group has tendered for jobs totalling over RM1bil and has successfully secured three projects with total contract sum of about RM297mil.

Its local construction portfolio include SENI Mont' Kiara, a high end condominium project in Mont' Kiara; an integrated hotel cum office towers project at KL Sentral and the Kulai-Second Link Expressway Interchange.

It is also involved in the construction of phases three and four of Sandakan Harbour Square in Sabah, comprising a modern lifestyle mall and a hotel.

Lai said Ireka, which had been active in Vietnam's property market over the past four years, was ready to export its construction expertise there.

The group is confident Vietnam's property and construction markets would bounce back strongly in a year or two's time.

Lai said the construction industry in Vietnam was growing in tandem with the economic development of the country and demand for expertise in the infrastructure, commercial and residential segments would continue to rise.

Earlier this month, Ireka Engineering and Construction Vietnam Company Ltd (IECVCL), a wholly-owned subsidiary of Ireka Corp Bhd, secured a construction package to build a general hospital at the International Hi-Tech Healthcare Park (IHHP) in Binh Tan District, Ho Chi Minh City, in Vietnam.

The contract, valued at RM27.58mil, comprises the construction of a reinforced concrete structure and related ancillary works for the general hospital.

By The Star (by Angie Ng)

Bina Puri eyes RM250m revenue from property

The Jesselton Condominum. Bina Puri is on an expansion trail to strengthen its presence in Sabah. Inset: Bina Puri Holdings Executive Director Mathew Tee

KOTA KINABALU: Bina Puri Holdings Bhd is projecting a total of RM250mil sales revenue from its property division or 20% of the group's overall ongoing projects this year.

Bina Puri Holdings Bhd executive director Mathew Tee, 35, in a media Q&A session at Bina Puri's office at Alam Mesra here on Saturday said the contribution marked the construction group's effort to shift away from its core business activities to property development.

Of the amount RM66mil is from Sabah, said Tee adding that excellent performance of property market in Sabah had contributed positively to their property division from nothing last year to 20% of total gross development this year.

The group's other substantial property contribution came from its new property launches in the Klang Valley, Penang and Johor.

Tee said the company's shift towards property sector was part of its exercise to diversify and balance the group activities from mainly construction.

“We find that property division gives better profit margin. We foresee that in next five years Bina Puri will have a 50:50 mix between construction and property,'' said Tee adding that this year was a record year for Bina Puri Group with a revenue exceeding RM1bil.

The group bullish performance, he said, was due to large volume turnover of ongoing projects which was on average of RM350mil per year or about RM18mil per month.

For the past five years, the group secured on average of RM1.5bil projects per year.

Tee said the group's overall total ongoing projects was RM5.7bil with unbilled portion amounting to RM2.6bil.

Bina Puri's outstanding orderbook of RM2.5bil will roll out over the next two year.

Tee said the company is on an expansion trail to further strengthen its presence in Sabah. Bina Puri has been in Sabah for 15 years and had completed more than RM1.5bil worth of projects here. Currently, it has over RM600mil worth of ongoing projects here.

Tee said the projects include the construction of two high-end condominium; Jesselton View and One Jesselton at Kepayan, affordable housing scheme in Sandakan, Central Lecture Hall & Post Graduate Centre for Universiti Malaysia Sabah and an 8-storey medium-cost apartments in Menggatal.

He added that 28% totalling about RM2.8bil of the group's ongoing projects in Malaysia came from Sabah and Sarawak.

Bina Puri Holdings Bhd is a Bursa Malaysia Main Board company with 35 years of experience in civil and building construction both locally and internationally.

By The Star

Bina Puri unit secures RM1.1bil projects in Brunei

MIRI: Bina Puri Holdings Bhd's subsidiary, Bina Puri (B) Sdn Bhd has secured a total of RM1.1bil worth of projects in Brunei.

Bina Puri (B) Sdn Bhd chairman Datuk Ali Abdullah in a Q&A session in Kuala Belait, Brunei on Friday said the company had an unbilled portion totalling RM265mil until 2013.

He said it planned to secure another RM600mil worth of projects in the Sultanate this year.

He said currently, the company was awaiting the results for two tenders worth about RM192mil which would be known within the next three to six months.

He said, Bina Puri was working on another five tenders worth RM416mil earmarked for this year. Bina Puri, which is involved in construction and infrastructural development, started operations in Brunei in 2007.

“We are looking at the possibility of hopefully securing about RM600mil,'' he said adding that Brunei offered great investment potential especially in civil and construction works as well as hospitality management.

Ali said that among the ongoing projects secured were the construction of 2,000 units of houses for Brunei Economic Development Board (BEDB), which is due for completion in April; infrastructural and housing works in Kampung Lugu and the redevelopment of Ong Sum Ping serviced apartments in Bandar Seri Begawan.

He said Bina Puri group started collaborating with the BEDB in the RM692mil project in 2009, adding that the venture in Brunei accounted for 16% of its current projects totalling RM5.7bil.

By The Star (by Diana Rose)